downside. [closing bell ringing] liz: there it is. let's how the stocks finished up, a 40 point gain. microsoft represented 19 points of that gain. steve baller america the ceo says he will be gone in 12 months as he looks to retire. s&p 500 up by six. nasdaq up a half of a percent. russell 2,000 up a fraction. adam: here are the front page headlines. new home sales dropped 13.4% in july, hitting the lowest a annual rate since october. all regions had declines led by the west where sales fell 16.1%. liz: weak housing data helped to lift gdd today. the precious metals jumped $25 to end the week at $1395 a troy ounce.

that is the highest level since early june. for the week prices were up 1.9%. adam: global markets in advance discussions to merge with direct edge. that would create the world's second biggest market operator. liz: moody's threatening to downgrade several big financial firms saying the government will more likely let large banks fail. if moody's follows through it could lower ratings of names like goldman sachs, jpmorgan and morgan stanley. adam: are you ready for football? ad slots for the 2014 super bowl are 85% sold out that is according to fox sports. 90% of the space is expected to be sold by the time the nfl season kicks off in less than two weeks. "after the bell" starts right now. liz: what a week of news flow this entire week. so much happened for the markets. let's break all the action.

sandy lincoln bmo chief market strategist and mark sebastion in the pits of cme. mark, to you first. we finish out a week with drama and trauma. let's talk about the headline that you feel is most important as we do have a lot 6 fet heads con a gaiting, by the way we'll go live to jackson hole for peter barnes report through there but a big day today. >> yeah, you know the 10-year note stopped selling off. that is allowing the market to get its footing here. as long as the 10-year note was in turmoil and we see rates rise and rise, was possible for s&p or economic data or any type of bid to really hold anything. volatility in the 10-year note is a scary concept to the market. now that it held, and stopped selling off we're seeing equity markets get a footing and starting to rally. despite all the come moex this -- commotion this week, how much equities markets moved net?

we are plus or minus five or 10 bucks from where we started on monday. we had a lot of volatility to go nowhere this week. adam: hey, sandy, i want to bring you into this. we have to talk about microsoft in a second. this has me disturbed. we saw some bad housing numbers. some of the losers today, home depot a loser on the dow, this is not good news. how do we keep the market going forward if consumer it seems is pulling back. >> i think, adam, i wouldn't necessarily agree with the conclusion that the consumer is pulling back, maybe a pause and the pause that refreshes actually as we get further into the quarter. it could be definitely a choppy quarter for sure. we have the debt ceiling coming up. we have the budget coming up. the fomc and what mike was talking about with regard to the taper. i think investors should look at the choppiness as opportunity. maybe a soft landing in china comes b i think the u.s., whether it mixed data on housing which i think it mixed right

now, auto sales which are strong, consumer confidence which historically at high levels and ememployment numbers improving. i don't think i would panic over one data point with respect to housing right now, adam. liz: mark, with that number, something that drove traders in the pits today? >> not really. it is all about the 10-year. one interesting point, the s&p 500 futures options that trade over there, if you look where the bid, where the option buying is, you can actually see a big up tick in the expiration cycle that expires right after that fomc meeting in sent. so everybody is looking at the fed. the fed is in many ways is kind of controlling the markets near term destiny. long term, doesn't matter. but in the near term, everybody is looking at the fed. so, really it's non-farm, it's federal reserve. we're in a market basically where things are starting to correlate unless you're microsoft. liz: jobs still matter.

jobs still matter, non-farm payrolls, right. >> yep. that is exactly right. >> i would add to the perspective on the taper. i think the taper is very significant and spot-on point but people have been speculating about the taper. it will be nice to actually get there because i think the federal reserve is still waiting for data. it is still if, not necessarily when in september but when they do do something in september if that is when it happens i think it will be a very light tapping of the brakes. i don't think they go from 85 billion a month to 40 or 42. adam: sandy? >> yes? adam: talk about making money microsoft. i know you have a small position there. mark said if things correlate with microsoft. names being thrown out about potential successors to ballmer. one i haven't heard yet, year ago, scott, former executive from apple who had to leave ungraciously after the problems with mapping. he understands cool technology. he obviously has engineering

background. any chance you could see his name over there. >> there are any number of names, adam. there have been a lot bandied b the stock price is not so much indictment of ballmer as it is validation and goodwill and value of that franchise, brand name, the enterprise value. if they figure out how to cobble important parts on to the enterprise value, for example, whether it is social media or some sort of entertainment platform that can relate to the enterprise they have got a real go ahead mine there. the question is who is best to exploit it? there are a lots of good names. bill gates will have his hand who the final one is chosen. liz: we had in the last hour these names thrown out, tony bates of skype, mark hurd of oracle and, from google. all those names might be considered. >> absolutely. liz: mark sebastian, we look forward traditionally one of the

slowest weeks, what do you think happens? we know volume will be slow but that just means swings can be a bit more dramatic. >> yeah. i think it is really interesting, i think the 10-year now that it is done selling off, it will be a low volume week where we see the s&p slowly creep higher. i think we're probably going to make another run at 1700 going into non-farms. from non-farms that's where we'll either break out lower or higher. so next week will be a slow week but i probably bet it will be in the green column based on what is happening in the markets really running things. liz: thanks, mark. our thanks to sandy lincoln. good to see you both. >> thank you. adam: a window into microsoft's future after ceo steve ballmer has announced his plans to step down over the next 12 months. investors seem to like the news. shares of the tech giant jumped. that's a tongue twister there so is it time to buy the stock? we have griffin securities

senior research analyst and you have a price target of $41. people seem to be optimistic right now. one analyst said $45. now we might get performance out of microsoft? >> we have been expecting that. we started with a price target of 38. took it up to 41 recently. the recent speaker spoke about enterprise value and things that could unlock the value very much in line what we've been saying the last year. liz: like what? >> they have at least two businesses that are generating enormous profitability. their business division where office lives. that is 65% operating margin business which is quite unusual. the server business which people might not be too familiar with, but it is tremendously profitable and great market share. we expect windows 8.1 will be better product cycle than windows 8 turned out to be, maybe not a high bar but we expect it to be better.

there are part of our thesis for them to catch up and gain share in areas where they're underrepresented, part of the criticism leveled at ballmer but we think they have opportunities to catch up. adam: where are the opportunities to catch up? they miss i had with mobile and blew it with tablets. they have been left behind. >> i disagree with that behind on the surface tablets. there will be next generation of surfaces. they're working on that. we expect new versions of that. they can't have just stopped at the first version. rt version was not particularly successful you're right about that, but we think the windows pro version is better machine and we expect it will do better in upcoming version. in mobile, nokia is doing better as their primary partner. they're be subsidizing them, $4 billion a year but it is beginning to pay off. liz: jay, you're obviously bullish. we were trying to game who will be the next ceo. who is your thought?

>> i don't want to jinx anybody by naming names. i think there is qualification for what they should look for, not that i've been invited on to the search committee but i'm thinking of some other software companies which in the last five years or so have gone through similar changes. not quite as dramatic or controversial, they have gone from ceo's that have had perhaps more of a sales or marketing background like a ballmer, to ceo's with more of a technology or engineering background. that's what the company needs now. that came up in the earlier comment. when you look at reorg for example, last month, four of the business segments that they created have the words, engineering group in their name. that gives you an indication that there should be a technology oriented ceo in place, more so than we've had. liz: good to see you. thank you very much. we'll watch it. jay howard. jay didn't jump in on the game, the guessing game. adam: i wanted to pin you down with some names there maybe in the commercial break we'll do it. thanks, jay. >> thank you. liz: we're talking with a former

microsoft senior vp who once called bill gates's enforcer. earlier this year he wrote a very controversial tell-all book, criticizing, brutally beating down steve ballmer and his leadership. adam: to taper or not to taper? the big question fed officials are debating ahead of their meeting. which way are they leading? we're heading to live to jackson hole, wyoming with an interview with st. louis federal reserve president james bullard. liz: we asked you, do you think microsoft is better without steve ballmer. log on to facebook.com after the bell. log on with your thoughts who you think should be the next ceo. ♪ [ male announcer] surprise -- you're having triplets.

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through all of our energy operations, we invest more in the u.s. than any other place in the world. in fact, we've invested over $55 billion here in the last five years - making bp america's largest energy investor. our commitment has never been stronger. liz: shares of autodesk hitting a new 52-week high today, following weaker-than-expected earnings. nicole petallides, how does that work? >> they were a real winner on the s&p 500 today. also getting positive comments from some analysts. they will have an investor meeting in october in san francisco where people are waiting to see more from them. at that point they did see declines in second quarter profit. the projections were a little bit weak but so far some analysts have lowered expectations but still have high hopes for this company which is interesting. think it is one we'll continue

to watch into the fall. it certainly took off today, hitting a new annual high. year-to-date is a winner. we talk about software and services and the like, certainly autodesk is there and certainly a winner on the s&p 500 today. liz: nicole, thank you very much. adam: the federal reserve is holding its annual conference for central bankers an economists in jackson hole, wyoming, and you can bet one of the big topics, tapering. when can we see the beginning of the end of quantitative easing? liz: joining from us jackson hole is our own peter barnes who is live with st. louis federal reserve president james bullard. go ahead and ask him, peter. >> guys, thank you. jim is ready. he is also we want to remind everybody a member of voting member this year. jim, $85 billion in quantitative easing, fed is buying to keep interest rates low and starting to taper that.

where do you stand on that right now. >> i think i'm on the record as being vague about that. >> well try and get you to more specific. >> no, i think, we've all said that it is data dependent. we want to see more data. i might be, you know, emphasizing caution here. i think, inflation is running pretty low right now. i was, you know, saying earlier today i don't think we need probably to be in any hurry to to do the tapering so i think we can afford to wait, get more data, to see if the economy is strengthing the way we're predicting it will in the second half of the year. adam: we have this august jobs report coming up september 6th as you know. what kind of numbers would you need to see in the august payrolls and job creation to perhaps support tape everying in the sent meeting? >> well, i wouldn't want to put too much weight on one month's numbers. that of course the jobs report is always a big piece of data.

but, you know, i think, and there's often in the jobs report there will be revisions to previous months. maybe that goes down. maybe it goes up, i don't know. i would like to see where that comes in and we'll make an assessment from there. i think unemployment is important too. unemployment ticked down last time. we'll see if that continues this time. so a lot of things to look at this year. >> a lot of your colleagues, 75 to 200,000 jobs a month in the payroll report would -- >> i don't want to pin it down right to one numbers. you have to look at the jobs report as a whole and you have to look at gdp, inflation and look at other factors in the economy. we had this housing number this morning. yields are rising. i think it is a bigger decision whether jobs comes in with a certain numbers. it's a important component but -- >> you would not rule out taper in september if numbers are

heading the right way then? >> i'm advising if it was me and i was dictator i would be cautious here. >> wait and sigh. >> whether there can be a put on the table i can go with. >> we herd you saying i think last week you might be able to support a small tapering to get started and, you know, i don't know -- >> the thing about this, this kind of a decision, there are so many dimensions to this. there are lots of ways to cut this. have the amount be larger or smaller. the question if you do something at this meeting does that presume something at the october meeting? you know, so there are a lot of ways to cut this. a lot of ways to think about it. >> but again -- >> you could also couple that with other adjustments to the policy and change in dimensions and policy mix. i'm not quite sure where the chairman will come down. i'm not sure he knows. we'll wait to get closer to the meeting to put something on the table. >> you wouldn't rule out

potentially small tapering in september? >> okay, i wouldn't rule it out. >> there. we got you to be a little more specific there. >> yeah. >> but as you mentioned there are a lot of variables here to look at and one of them is that interest rates have already backed up. the markets already said that on the long end mortgage rates are up by a percentage point. >> yeah. >> we saw the new home sales number this morning was way below expectations. >> yeah. >> does that worry you and is that a data point that makes you more cautious starting to pull back on qe? >> i heard reports about that number. i vail 20 looked at it yet -- i haven't looked at it but when we get back to st. louis with the staff we'll look at it. we got a robust recovery going in housing the last 18 months. we want to see that continue. i would be arguing there is plenty of momentum there but this gives me a little bit of a pause. >> you've been very firm on the

inflation issue. you mentioned inflation is coming in below the 2% target. talk about that just a little bit more in terms of the qe piece of this? i know you've also been talking about the, the separate decision to start raising short-term fed funds rate and inflation. >> the qe side, it gives us more room to be flexible about when and how we go about -- >> current low inflation. >> current low inflation gives us flexibility to think about how we approach the tapering issue. on the funds rate issue or policy rate issue, one thing that we could do is, firm up forward guidance by saying sayit we won't raise rates if inflation is running below 1 1/2%. that is on the policy rate side. >> all right. >> so the thing about that is, we've already got 2.5 on the high side. >> right. you put the 1 1/2 on the lowside, you kind of say, this is a symmetric thing. that might help people, might help to reassure markets we're not going to prematurely raising

interest rates when inflation is running at really low levels. >> hold that thought. we'll take a break and come back and pull adam and liz into the discussion. guys, back to you in new york. liz: we have a lot. the size of the taper when it does happen, that's what we want to know and who might be the next federal reserve chairman. >> i already tried that. liz: we'll try it again. adam: we'll try to pin him down. liz: poor james, can i be in the background? james bullard, more of our interview live in a moment from jackson hole. adam: we have inside view of steve ballmer's microsoft from one of the ceo's harshest critics. he was known as bill gates's enforcer. he will give as you window into ballmer's controversial, that's an understatement, management style. ♪ ♪

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adam: everybody knows the federal reserve kicked off its annual bankers conference in jackson hole, wyoming today. >> let's go back to peter barnes with federal reserve st. louis president, james bullard who is a voter. we'll pull all the president's men, jim, and when it comes to the next leader of the president federal reserve. don't hang-up the phone and hang up. are we on the right track when we put forth two names summers and yellen or is there a possibility there might be a dark horse? >> well you're asking the wrong guy. the person that makes this decision lives in the white house and you got to ask those twice what they have in mind but, you know, all the reports seem to indicate that its larry

summers and janet yellen are the top candidates. i don't have anything that would dispute that. adam: let me ask about this. he is described as arrogant, abrasive, acerbic. those are larry summers's good qualities. what kind of chairman would he be? what can we expect if larry summers becomes the federal reserve chairman? >> i don't know him well enough to make a prediction on that but both he and janet are excellent economists and they would be right at home with other economists and talented people and the top staff. i don't think there would be any cultural clash in that sense. i mean, it is very much a group of people that thought a lot about monetary policy over a long time. liz: let's get back to the tapering, when it does happen, when the appropriate moment does arrive, jim, what size could which expect to see? what shaving? would it be just a few billion dollars? would it be a lot more?

i know you guys have your number one focus and that is to not shock the market as i'm sure. >> yeah, i wouldn't want to prejudge what the chairman wants to do on something like that. if we do decide to go ahead and, that is probably the kind of thing that it would come down to, just a few days before the meeting, kind of lay out some options and, you know, shading like that, might be pretty sensitive to the conditions right around the time of the meeting. but one thing i do think that is important that is having effect on decisions that we don't have a press conference at every meeting. i advocated we at least think about, making all the meetings identical so the committee feels comfortable if they want to make a decision at one meeting or want to push it off to the next meeting to get a little more data that they can go one way or the other. only having press conferences at some meetings is making it seem

both among committee members and media, financial markets, seems like we only make the decision when there will be a press conference. take october of the table, taking october off the table which otherwise would be a natural way for the committee to reach consensus or negotiate over this outcome. adam: two things you brought up in your discussion with peter that worried me. you said inflation is lower than you would like. i'm thinking you guys are talking about deflation. you also said you would advocate quite a bit of caution, at that was the quote, quite a bit of caution with tapering and i'm curious, the job creation we see in the united states is a great deal part-time work. does the fomc have any concern that the jobs, 70% this year that are created are part time and not full time and wouldn't that be cause enough to continue qe as we understand it today? >> yeah, i think that's, that's a great argument. some of the talks i've been giving i've been contrasting the

job down numbers, so the jobs report numbers, those have been stronger since last sent but if you look at the hours growth numbers, which brings in the fact that a lot of those jobs are actually part time, hours growth has actually been slower than it was, back last year at this time that's a good, those two pictures are a good contrast that bring out this part time issue. that would be a reason to argue maybe labor markets are not as owe rust as we would like and maybe we should push ahead with the asset purchase program for a while longer. liz: if you were -- >> i will jump back -- go ahead. liz: if you were teaching a course on economics, the economy, what have you, at say, berkeley, stanford -- >> my students would rebel. [laughter] liz: adam says syracuse. adam: go orange. >> what data point, aside from what you talked about be the unemployment rate and the non-farm payrolls, would you

tell them to watch? is it durable goods? is it the jolt number? what would you advise people is one of the more important pieces of date that that come out every month to really look at? >> well, the jobs numbers are important but i always tell people we try to look at the totality of the data. you have the international arena and things going on there. you have got inflation numbers and various measures of inflation. you want to look at that know what is going on there labor markets are important. movements in the financial markets. there are many dimensions. you can get away from the fact you have to take it all into account when you're trying to make an an important decision like this. liz: i so would have thought you would have said the fed beige book. >> thattis when my students eyes would glaze over. is this going to be on the test?

adam: okay. st. louis federal reserve bank president james bullard and our fed head peter barnes. thanks to both of you life, from jackson hole, wyoming. liz: the mist coming over the mountains. steve ballmer plans to step down within the next 12 months. adam: the man once dubbed as microsoft's secret power broker. we're talking to a former microsoft senior vice president and one of ballmer's biggest critics. does microsoft need this management change? and who does he think will be ballmer's successor. before copd...

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liz: all quiet own the times square front from nasdaq. a glitch shut down trading yesterday on all nasdaq listed stocks and it went on more than three hours. while the reopening of the exchange went smoothly, many traders investors, ceos i've been speaking with were upset about the handling of the situation. even former sec chair harvey pitt was critical. here is what he said on our program yesterday. >> i think this was handled terribly on the part of nasdaq. it seemed as if they didn't really know how to respond to these events. they didn't have clear statement of what was going on. liz: so this morning i headed down to the nasdaq to speak with ceo bob greifeld. i asked him to respond to harvey pitt's comments and

criticism nasdaq and greifeld were facing. here is what greifeld said. >> i think it is hard for people outside direct involvement with the problem to comment and comment intelligently on it. so -- liz: you're taking a smack at harvey pitt? he is not -- >> i'm saying for anybody who is not there, right? people who are not on the open lines, who are not in the head trader alert communication, it is hard for them to know, right and hard for them to comment intelligently in terms of what happened. liz: in terms of what happened. he got a little testy there, but, adam, obviously this was a situation where they're going to look at it, figure out how to make sure it hopefully does not happen again. adam: there is no defying as we switch gears to another big headline, that microsoft ceo steve ballmer was a passionate man who loved his company. >> i have four words for you! i, love, this, company! yeah!

liz: why notany, howard deanesque there. but sometimes love isn't enough. today ballmer announced he will resign within the next 12 months. critics say his decision was long overdue. liz: joining news a fox business exclusive is one of those critics, waa keep chem pin. former microsoft senior vp and author after book, a power broker that breaks his silence. when you heard the news, a and were you happy when you look for the what the company holds for the future? >> there is nothing to be happy about, meagan. i thought he read my book. adam: steve balmer finally read your book. who would you like to see replace him? >>ed adam, i believe, i have to go out and hire somebody the same way yahoo! did.

maybe one of the lieutenants of google. that will change the whole manment strategy of that company because that i think is needed. liz: one of the lieutenants of google's names was just floated in the last hour, waa keep, nikesh aurora. very high up on the food chain, a friend of this program, a very smart guy. is that the name you look forward to getting into microsoft? >> i can tell you one thing, you're on the right track. adam: that is an interesting come men. do you have some kind of inside information? are you in touch with him? >> no, i am not but, i heard this through the grapevine in the morning. adam: i'm not believing that you're not in touch with him. i think you know something. can you share it with us? >> no. some friends who were basically telling me his name and, i have watched him for some time i think he is a terrific guy and

would be super for microsoft. liz: who is going to be on the so-called deciding committee aside from somebody like bill gates? >> that is the problem. you don't want bill gates and you don't want steve ballmer on that committee. liz: whoa. why wouldn't you want bill gates? isn't the best interests of the company in his best interests? >> you could say so, yes i agree with you but at the same time he is as responsible as steve ballmer for missing the boat over the last 12 years. adam: let me ask you about missing the boat because people think, today we saw microsoft shares shoot up but they have missed the boat with hardware, with the smartphones and tablets. it seems this is not the kind of environment where you can catch up. is it time to make smaller microsoft and concentrate on generating wealth and revenue? >> i agree with you. get rid of these devices. biggest mistake they ever made. liz: what should they be doing, waa keep? you sound like you have pointed

and focused ideas. what would get them back on track. >> software and in particular software for consumers. because gone by the wayside, microsoft. they served business community and the big future is in for instance software for consumers. can they do a better facebook? oh, yes, they can. adam: you think they could catch up and surpass facebook? how? with what platform? >> just the software. look, facebook is one of most boring products you use. liz: well, i agree. i look at it, what is so exciting about this but, how about binge? they tried to take on, not microsoft, they tried to take on google and yahoo! they are increasing share but very tough these days to come in well behind an established winner like facebook. i'm not saying don't try it. we love davids versus goliaths stories but how would they go about doing that on a grander

scale not just like with an idea like facebook? >> you know, social media today, basically needs a face-lift in order to make it even more interesting to more people. if that is done right they will find the audience. the audience will fine then. adam: okay, so we've been beating up on mr. ballmer and microsoft. what are they doing right? is windows 8 something that is right or need to go back to the drawing board? >> i believe windows 8 was not a bad idea. yes there is a little bit of execution missing there at the end, but you know what? they will get this fixed in october with 8.1. not a problem. i think the real issue is, windows is basically some kind of a platform and that is not good enough. liz: waa keep,djoachi, he has no shortage of ideas to talk about. will you join us when the issues are being discussed?

>> anytime. liz: good to see you. adam: thank you, sir. liz: or talk to you. the housing recovery is it running out of juice? alarm bells are ringing loudly after today's grim new home sales report. in a moment we get a reality check of housing with brian stevens, hosts of one of the hottest retail blogs out there, the national real estate host. ♪

liz: july new home sales fell to their lowest level in nearly nine months but there are still bright spots in the housing market. so-called have you heard the term, so-called sand states, with the highest foreclosure rates after the housing crash. guess what? they're no longer in the top 10 for foreclosures. what are the states doing right to clear inventory and get prices up and with can other

states learn? joining us two experts in the field, the hosts of national real estate post. sand states. first of all where did we get that name? >> well the sand states are just what they imply. they have the states with sand around them. florida, california, nevada, and arizona. during the height of the implosion in 2008. they were some of the hardest hit states. the reason was they grew the most, excuse me, grew the most off loans we were doing in 2003 and four, subbality and neg-am that's why they were the first to fall. they became the poster children states what was going on in our industry. because they fell the most they have the most room to pick themselves up and appreciate from the bottom. the reason the sand states fell out of the top 10, because they have amenities and things people really want to have. where do you want to spend your winter, liz? go to toe peco, kansas, or fargo

north carolina or -- liz: you've got michigan on the map. michigan is there. are we talking about sand on some great lake shores? a little bit after stretch? >> that's essentially why it is a bit after stretch, yes. liz: thanks. all right, so what are they doing right? they have, quote, amenities. i get that part. they're still looking at same ticking up when it comes to 30-year mortgage rates, are they not? >> they are, but they're still states where people want to go. that's what they are. they have the most growth people want to buy second homes there. investment homes there because they are great places to go. vegas, arizona, california. florida. so, now they're reaping those same benefits. they sell hard. they sell before anybody else, but still now you're buying houses at pennies on the dollar. they're still a great place to go. so they have got an advantage. >> when you look where the markets fell to specifically in arizona, one thing was interesting in 2009, if you

bought a house in 2009 in phoenix, arizona, your catastrophic replacement insurance was going to be two to four times what the national average was because you simply couldn't replace houses for what people could buy them for. so there was incredible after affordability in those areas. investors realize these are destination places where people go, they were buying them up as second homes. of course there is great weather in december. liz: are you two worried we're starting to see a bit after bubble forming in those states? if the foreclosure inventory worked its way out and these prices start to increase, do we head toward that same precipice that we saw back in 2007? >> you know, i'll chime in. i really don't think so. i think what you're going to see is the same thing you're seeing with the new home sales, you know. you will see a cooling off. we have rates bumping up. when rates bump up you have tougher qualifying for people to

buy homes, et cetera. that is a natural thing that will happen. they enjoyed great appreciation they're climbing out after hole. i don't think you will see a bubble. i think you'll see cooling off. that is what i think. >> we're seeing ebb and flow in houses. if we were having conversation couple months ago, liz, we would have conversation the market was too hot and unsustainable. now a cooling off was necessarily. is it cooling off because interest rates are going up? absolutely. as you said in the previous segment of the prices will continue to go up. liz: so buy now? >> all the loans written on these houses in the market we're in right now are sustainable, 30-year fixed-rate, fannie, freddy, fha deals. liz: you guys are great spotting trends. there are lines when it comes to all kinds of lotteries for brand new homes. what is the number one trend you're seeing right now as we finish up? >> what is the number one trend we're seeing within the industry? liz: just the whole industry,

the real estate world? >> here is what it comes down to. rates are going to jump up. sales prices will continue to go up. we have more demand for houses we have in spite of numbers we've seen which was a little shocking today with new home sales. we'll see continued trend of upward rates and upward sales prices. the key is, if you want to identify something that will affect the market going forward, new rules of qualified mortgages set for the by the cfpb put forth by the dodd-frank rule that will limit debt to income ratios on person's qualifying ability. if you want to see cooling off coming six months, nine months as we move into next year. it will not be increase in rates but policies from the cfpb qualifying for mortgages. >> here, here. liz: jacuzzi booth tub would be a shorter answer. >> by the way, liz, new black is black on you. liz: is that your comb? i'm doing frank bracelet thing.

we both have the same. >> that's right. i'm representing. yeah. but look it is not as bad. come on. liz: you have the mullet. >> self-conscious now. >> this is what i deal with. liz: bring up the whole element of it with the panel shirt. brian stevens, frank, great to see you guys. thank you so much. >> thanks, liz of. adam: black is the new black, on you. i think they like you. netflix stock is on a role soaring 300% in the past year. is streaming video companies rally in danger of derailing? we have details you can't afford to miss next. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me.

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liz: take a look at this stock chart. netflix is up more than 300% in just the past year? what could stop this rise? arcane accounting and binge viewing perhaps? dennis kneale with more on the story. dennis. >> you know what? is netflix headed for a fall. a new accounting change could slash earnings by forcing netflix to deduct the content spending earlier and faster trade paper variety said. netflix paid hollywood $5 billion for various rights and shows but doesn't deduct the obligation instantly.

it spreads out expense over period of years even when it spends money over a period of years. that keeps earnings higher than they would be. netflix is in a recent filing is studying whether they have to record the costs earlier which would reduce earnings and that is because of a surprising change in viewer habits, binge viewing. netflix pumped $150 million or more in new original shows revived, "arrested development" and tawdry women in prison drama, orange is the new black. netflix post as new show, "house of cards," all 13 episodes at once. fans gobble up the entire series in a weekend. one survey of people who downloaded opening episode of "house of cards," all 13 episodes whether posted day one, 5% had final episode by day two. so if fans binge and watch the new stuff all at once, netflix may have to deduct the cost of those shows over a shorter

payback period, maybe over months instead of waiting years. this could be damaging to netflix's earnings as the company invests ever more money into new programing, rather than reruns as a way to challenge hbo to differ rent eight itself from hulu and amazon. when a earnings fall a stock price often falls. so far netflix not to worry. stock was up today another 3%. liz, adam. liz: dennis kneale, thank you very much. we appreciate you being with us this week. we'll see how next week turns out. it is always great on "after the bell." adam: "money" with melissa francis is next. liz: have a great weekend.

melissa: i'm melissa francis. here's what's ceo tonight, why the company is dumping spouses from the company health care plan, another huge hurdle for workers everywhere. is your company next? do you know what day it is? it's franchise friday, of course. john and lynn are back with the newest hurdle to opening your own franchise, cutting through the red tape you didn't know existed. it is every owner's reality. member, we are taking you through the process step by step so you can open yours. i'm opening mine. plus, who made money today? here's a hint. news of the retirement looking good on the surface, and shareholders seeing green as a result. not sure? keep watching andfi